QQQ Melt-Up Set-Up that Appears to be Failing

QQQ's Light Blue Megaphone was a Sornette Melt-Up Set-Up for a Surge to the Navy Megaphone Top but It's Failing to Break Out

QQQ’s Light Blue Megaphone was a Sornette Melt-Up Set-Up for a Surge to the Navy Megaphone Top but It’s Failing to Break Out

QQQ’s light blue megaphone is exactly the Sornette melt-up set-up I was hoping to see for a surge (green scenario) to the navy blue megaphone top.  But QQQ has failed to break out into the melt-up.

Usually if QQQ were going to melt up it would have started already.  That increases the likelihood that something like a triangle (red) is forming across the navy megaphone VWAP.

If the triangle breaks out downwards QQQ is a favorite to break out downwards from the navy blue megaphone into a sizeable dip.  The target would be 100ish.  A fast stab down that got bought hard above 100ish could be the start of a huge move up.  A breakout through 100 would target 70ish.

If the red triangle breaks out upwards, the target is roughly the navy blue megaphone top.  Then QQQ would need a retrace to at least the navy megaphone VWAP and would be a favorite to pull back to its bottom.

 

 

QQQ Flat-Bottomed Megaphone, Potential Sornette Melt-Up Set-Up

QQQ Flat-Bottomed Megaphone

QQQ is a Favorite to Go for the Neckline of its Light Blue Flat-Bottomed Megaphone

QQQ has formed a flat-bottomed megaphone (light blue) at its red megaphone VWAP. This could be the topping formation that sends QQQ breaking out downwards from its red megaphone into a crash all the way to 100ish or beyond (purple scenario).

But other formations on the chart make it more likely that QQQ will break out upwards from that flat-bottomed megaphone, either after the gap fill (pink scenario) or a slight break through the flat-bottomed megaphone neckline.

A break through the neckline that failed to take out the July 27 low would put a Sornette melt-up set-up on the chart with a target of roughly the red megaphone top (green scenario).

QQQ Chooses Megaphone

QQQ Selects a Megaphone Top

QQQ Selects a Megaphone Top

Yesterday at the open I showed that QQQ and NQ had a choice of plunging to start a megaphone top or continuing up to form a rising megaphone or rising wedge top.

The Nasdaq put in a little plunge to choose the megaphone top then promptly retraced to the megaphone (navy blue) VWAP.

QQQ could plunge straight from here to the bottom of the red megaphone (pink scenario), retrace to the red megaphone VWAP, then keep going down.  But it’s a strong favorite to put in another move to the navy blue megaphone top (green scenario). That’s because it broke out of the light blue rising megaphone without having formed a proper head and shoulders top inside it.

And it could keep megaphoning after that to morph the potential H&S top into a rising wedge top (purple scenario).

 

NQ has Maxed Out a Set of Price Channels

Nasdaq Futures (NQ) have Maxed Out a Set of Price Channel and Started a Top

Nasdaq Futures (NQ) have Maxed Out a Set of Price Channel and Started a Top

NQ has maxed out a set of price channels to its orange and silver megaphone tops using a system from The Neely Method for counting price channel waves plus traditional methods for drawing rollover channels.  Now NQ has to have started a top for the move out of the July 4th low.

But you can’t short yet.  Although you will occasionally see a very small fast top at the end of maxed out price channels, a protracted megaphone top (green scenario) is more likely and something like a rising wedge or rising megaphone top (pink scenario) would also be typical.

The pink scenario could also change the potential H&S on the chart (purple scenario) into a rising wedge top with another new high after the pullback to the orange megaphone VWAP.   You never know what kind of topping pattern you have until it completes and actually breaks out.